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Apple solidifies its product lineup heading into the holiday shopping season. Meanwhile, its new iPad branding offers some hints of what the future may hold.

The first eight months of 2013 were a little slow for Apple (NASDAQ:AAPL) investors. Thanks to shifting its product cycle in 2012 and concentrating announcements in the fall, Apple went for a much of this year with no product unveilings. Apple kicked off the festivities last month by introducing two new iPhone models, and has now followed up with its iPad event.

Here's everything Apple had to say today.

In other newsApple likes to give various updates at the beginning of its presentations. The company said that 64% of devices are already running iOS 7. There are now 20 million users of the new iTunes Radio service, up from 11 million last month. Pandora shares actually spiked on that revelation, so the figure may not have been as high as Pandora investors feared. The cumulative developer payout has now jumped to $13 billion, as iOS app monetization continues to accelerate.

Taking jabs at MicrosoftApple took numerous jabs at longtime rival Microsoft (NASDAQ:MSFT) during the event. Apple is making OS X Mavericks free for everyone, removing the negligible pricing hurdle that could be holding back possible adopters on the fence. Apple doesn't really need the extra $20 to $30, and would rather have more users unify in one version. The days of paying upwards of $199 for software upgrades are over, Apple asserted while displaying Windows 8 Pro.

The free software doesn't end there. Apple is also making iWork on OS X free, following a similar move for the iOS version. Again, Apple took a chance to poke at Microsoft Office 365, which costs $99 per year.

Intel Inside, at lastWhile other PC vendors have already begun to upgrade to the latest Intel (NASDAQ:INTC) Haswell chips, Apple has been a bit slow getting the newest processors into its MacBook Pro lineup. Apple added them in the MacBook Air over the summer, but many have been anxiously awaiting the professional lineup to follow suit. Apple is also aggressively dropping the entry-level price of the 13-inch Retina MacBook Pro to $1,299, while the larger version saw a $200 price drop as well.

Without further adoOf course, the feature presentation of today's event was the iPad. Apple says it has now sold a cumulative total of 170 million iPads. Through the June quarter, Apple had sold 155.1 million iPads, which implies that it likely sold nearly 15 million iPads in the September quarter that just closed. That would represent no sequential slowdown from the 14.6 million units sold in the June quarter -- impressive, considering how widely publicized Apple's upgrades are.

iPad Air. Source: Apple.

Apple is borrowing its Air branding from the Mac lineup and has now renamed its full-sized tablet the iPad Air. As expected, the device takes design cues from the iPad Mini, and maintains the same pricing strategy as before.

Perhaps more interesting, the use of the "Air" moniker also suggests that Apple is looking to segment the tablet market. We've been hearing a lot about a possible 12.9-inch iPad in the works, which could easily become the iPad Pro. That possible device could have considerable interest in the enterprise, especially if Apple released a first-party hardware keyboard accessory.

The iPad 2 lives to fight another day. Originally released in 2011, Apple is still keeping the device around at the $399 price point despite its aging hardware. Localytics just released data suggesting that the iPad 2 remains the most popular model, so keeping it around may still be the right call. That's especially true if it comprises bulk purchases within educational and enterprise environments where cost matters more than raw performance. For instance, the thousands of iPads that American Airlines has just deployed are all iPad 2 models.

Things get a little more interesting when we turn to the iPad Mini, which did indeed get a Retina display. When the original iPad Mini launched, it had the internals of the iPad 2 stuffed inside a smaller form factor. That meant saving on costs by using older components in order to price the device at $329 while maintaining Apple's margin profile. This time around, the iPad Mini with Retina display is getting the latest and greatest A7 chip alongside the high-resolution panel.

The net result is that Apple is increasing the price to $399. Displays are always the most expensive component, typically comprising around 40% of the bill of materials, so Apple is passing along this cost increase to the consumer. Google and Amazon have both raised prices of their own tablets, in part because of the shift to high-resolution displays. However, the first-generation iPad Mini is also sticking around, while moving down to $299.

Here's the new lineup.

Model

Starts at

iPad Mini

$299

iPad Mini with Retina Display

$399

iPad 2

$399

iPad Air

$499

Source: Apple.

There have been reports that Apple is facing supply constraints with the iPad Mini with Retina display. These appear to be true, as Apple's only indication of availability is "coming later in November," while the iPad Air ships on Nov. 1. There also was no mention of a gold option, which some rumors had suggested.

Also absent was the Touch ID fingerprint sensor in any of the iPads. This makes sense, as yields on these sensors are reportedly low and Apple is still behind on catching up with iPhone 5s demand (Apple currently quotes shipping times of two to three weeks). Allocating scarce supply of these sensors to the highest-margin product available is the right move to make.

Stop me if you've heard this one beforeiPad unit growth has seemingly decelerated in recent quarters. It's important to note that the full-sized iPad has been using the same design since early 2011, so some amount of demand stagnation is expected. By giving the larger version a redesign, Apple can reinvigorate demand for its high-end offering.

At $399, the iPad Mini with Retina Display is priced at a considerable premium to comparable devices, and the seemingly low production rates won't make things any easier. This might sound familiar, but Apple's biggest challenge over the holiday shopping season will probably be its ability to make enough stuff for everyone.

Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, Google, Intel, and Pandora Media. The Motley Fool owns shares of Amazon.com, Apple, Google, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Author

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker, and worked briefly at Tesla. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.
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